ANNAPOLIS – Special funds become a tempting target for the chief executive when a budget shortfall looms, but now some Maryland lawmakers want to make the governor lay out a repayment plan whenever such funds are raided.
A bill introduced in the House of Delegates Wednesday would require the governor to submit a repayment plan with a specific time frame to replenish the state’s special funds each time he dips into them. The rule would only apply to transfers of either $1 million or 10 percent of the fund, whichever is greater.
Special funds, also known as dedicated funds, are usually established in the state’s operating budget for certain areas of service, such as transportation and park maintenance.
“You can only raid these funds for so long, and then the chickens come home to roost,” said Delegate John R. Leopold, R-Anne Arundel, the bill’s primary sponsor. “These needed improvements are not provided for. As a stop-gap, it’s acceptable, but not as a long-term strategy.”
In 2003, Gov. Robert Ehrlich diverted $300 million from the Transportation Trust Fund to balance the state budget. Last year, he announced that the fund would be replenished through increases in vehicle-registration fees and fines for certain traffic violations.
Ehrlich’s predecessor, Gov. Parris Glendening, similarly transferred money out of the transportation fund.
Henry Fawell, a spokesman for Ehrlich, would not comment on the bill because it hasn’t been approved by either legislative chamber.
As for the Transportation Trust Fund, Fawell said the governor was under constitutional obligation to balance the budget. Ehrlich chose to use the trust fund rather than renege on his campaign promise not to raise taxes.
Leopold proposed a constitutional amendment that would have allowed transfers out of the trust fund only in an emergency and then would have required the governor to repay the Transportation Trust Fund within five years. The proposal went nowhere.
Leopold now acknowledges that a constitutional amendment would have been too restrictive. But he says the proposal’s scope — the Transportation Trust Fund — was too narrow and that a new law encompassing all special funds is necessary.
Delegate George Edwards, R-Garrett, is co-sponsoring the bill. He said banning outright the diversion of money from special funds would hinder fiscal flexibility, particularly during emergencies.
“We don’t have to go that far,” Edwards said.
Delegate Mary-Dulany James, D-Harford, also is co-sponsoring the measure. She said its purpose is not to prohibit the practice but to bring it under control and “encourage a more thoughtful approach” to tapping the funds.
“This would provide some checks and balances against the governor’s really extraordinary powers over the budget of the state,” said James Browning, executive director of Common Cause Maryland, a nonpartisan public interest group.
“Under the current system it is awfully easy for a governor to gut a program that he or she doesn’t like,” Browning said.
The House Appropriations Committee has not yet scheduled a hearing on the bill, HB 29, and Leopold hasn’t yet approached senators on the issue.
The chairman of the House Appropriations Committee, Delegate Norman Conway, D-Wicomico, was noncommittal about the bill. He said he was concerned that a statute making special funds less accessible could tie the governor’s hands too tightly.
Conway said requiring the governor to chart a payment plan would be difficult because of changing economic winds.
“Sometimes governors, regardless of who they are, are not always inclined to want to do that because of uncertainties that might be out there one year to the other,” Conway said. – 30 – CNS-1-14-05